Ready for Lift Off


shutterstock_32461936The ASEAN Open Skies policy is freeing up the region’s airspace and starting fierce competition over new and existing routes. The recent rise in airlines operating in Cambodia could be good news for tourists and ultimately the much neglected business traveller.

Cambodia is flying into a new era as the rising number of airlines, routes and passengers elevates the aviation sector to a new level, while the country’s international airports are seeing on-going upgrades to meet the exceptional demand. Fuelled by year-on-year increasing tourism numbers, the expansion aligns with overall growth in the Kingdom and its close ties to China.

According to data from Société Concessionnaire de l’Aéroport (SCA), which holds the concession for the development and management of Cambodia’s three international airports – Phnom Penh, Siem Reap and Sihanoukville – under a public-private partnership with the Royal Government of Cambodia, 30 airlines operate on a scheduled basis, as well as seven chartered carriers. Four new airlines entered the market in 2014 alone.

Nick Nayak, vice-general manager of one of the new airlines, Cambodia Bayon Airlines, believes that the advent of new players within the industry demonstrates a more general positive trend within the country.

“The introduction of other airlines and increased competition can only be good for Cambodia,” he says. “It shows that many realise how much this country will grow, and that they anticipate a growing demand for aviation in the region. In the past five years, Foreign Direct Investment in Cambodia has increased almost 200 percent. With more and more international investment pouring in, the demand for quality aviation will only increase.”


Among the new airlines set to enter the fray in 2015 is Japanese airline All Nippon Airways after it announced last year that it was considering expanding its operations to Cambodia. If it does, it would become the first Japanese airline to establish a direct, non-stop route between Tokyo and the Kingdom. Vietnam too has increased routes and presence in Cambodia. Low-cost carrier VietJet Air launched daily flights between Hanoi and Siem Reap, making it the third carrier, in addition to Cambodia Angkor Air and Skywings, to serve the Vietnam-Cambodia route.

Domestically, Cambodia saw two low-cost carriers start operating in 2014 after receiving their Airline Operations Certificates. Set to compete with the national carrier Cambodia Angkor Air, the new airlines – Cambodia Bayon Airlines and Bassaka Air – have strong Chinese backing.

Cambodia Bayon Airlines is jointly owned by Joy Air Holding Co, Ltd. and the China Aviation Industry Corporation. “The airline was formed as a unique opportunity to serve the ASEAN market with Cambodia as a major hub as well as to promote business ties between Cambodia and China,” says Nayak. The airline made its maiden flight in December 2014 and has two Xian Aircraft Industry Company MA60s, with further plans to expand both its fleet and destinations across China. It also has flights from Siem Reap to Sihanoukville.

Bassaka Air, which has partnered with the state-owned China International Travel Services, has leased two Airbus A320 aircraft from hotel, gaming and leisure corporate NagaCorp, and has seen positive signs early on with its competitive prices flying between Phnom Penh and Siem Reap.

According to senior officials at the State Secretariat of Civil Aviation, three more international carriers, backed by investors from China and Taiwan are expected to apply for their Air Operations Certificates in 2015. Increasing the number of foreign routes and airlines will increase the Kingdom’s connectivity within ASEAN and to East Asia, but it also places an added burden on airport infrastructure.

In 2014, the number of passengers going through Cambodia’s three international airports totalled 5.7 million. Phnom Penh and Siem Reap international airports provide nearly 500 regular flights per week, connecting both cities to 30 destinations in Asia and the Gulf region.




To manage the steady increase in passengers, SCA launched a construction campaign in January 2014 to double Phnom Penh airport’s capacity by early 2016. Plaza Premium Lounge Management Limited was appointed to design and operate the airport lounges at the newly-built extensions to Phnom Penh and Siem Reap airports’ passenger terminals. The company wants to introduce innovative services to travellers looking for airport value-added arrangements, including a ‘meet and greet’ service, spa and shower facilities.

“A key task of our activity, as an airport developer and operator, is traffic forecast,” explains SCA CEO Emmanual Menanteau. “We need our assumptions to be as accurate as possible so that we can achieve another essential job – configuring our infrastructure to match future traffic.

“Based on our forecasts and prior to the emergence of new local airlines, we launched the extension works of our terminals at Phnom Penh and Siem Reap airports, which will double their capacity to five million passengers a year each. Cambodia is growing at such an expedient rate. The need for air travel domestically and internationally in Cambodia will only grow.” According to Menanteau, airport upgrades are progressing to schedule and the new facilities should be ready for operation in early 2016. Limited upgrades are also planned for Sihanoukville airport, which received its first international flight in 2014 through the South Korea-based Skywings Asia Airline.

Menanteau believes that the biggest challenge awaiting the industry is to convert air traffic from its current predominant tourism base to a more business one. “Part of our job is to promote business travel, especially as our route network expands to international destinations,” he says. However, he adds that the spate of new airlines represents both an opportunity and a risk, due to the volatility of both the market and pricing elasticity. “We tend to be prudent about factoring in the emergence of local airlines while planning our infrastructure development.”


Such reticence is understandable. Apsara International Air, a private Chinese and Cambodian owned airline, had its inaugural flight between Phnom Penh and Siem Reap in October 2014, with the intention of commencing operations between Siem Reap and Sihanoukville by the end of the year. However, the airline released a notice announcing a temporary stop to flights in November, followed by a further statement on 9 January this year, announcing that it had cancelled all scheduled flights.

The airline arrived with massive expectations aiming to fly from Cambodia to 25 cities in China by 2015, and to destinations in Japan and South Korea by 2019. However, despite announcing that the curtailment of flights was only for a maximum of three months, as yet there has been no announcement of any continuation of services.

Cambodia has a recent history of failed airlines. Cambodia Angkor Air replaced national airline Royal Air Cambodge, which went bankrupt in 2001, and more recently Tonlé Sap Airlines rebranded to Wat Phnom Airlines but went no further than that. After a maiden single return flight from Phnom Penh to Tokyo, Asia Atlantic Airlines ceased its Cambodia-Japan connections indefinitely. Most recently Cambodia Airlines, Royal Group’s airline start-up venture with partner Philippine Airlines has been in the news for about 20 months, yet constantly shrouded in doubt.

Nayak believes that part of the reason for the failure of certain airlines has been due to a lack of homework. “Unfortunately, I think that some companies do not conduct their due diligence work and [don’t] realise what inherent barriers they will face when doing business in this environment,” he says. “It is the responsibility of any new business to ensure that they enter a competitively challenging market with the right resources.”

For him, the key to success lies in transforming the country’s rich potential into real growth by convincing potential customers that companies like Cambodia Bayon Airlines are serious about their business. “For aviation, we need to show that carriers in the region can provide a reliable service at a competitive price,” he says. “This will enable us to serve the entire ASEAN region and eventually outwards, with Cambodia as a major hub.”





AirAsia launched its new AirAsia ASEAN Pass in 2015 to take advantage of the ASEAN Economic Community (AEC). The AirAsia ASEAN, which applies to all 10 countries in the region, has two versions. The ASEAN Pass costs $160 and offers 10 credits for use on flights valid for 30 days from the start of travel. The ASEAN Pass+ ($290) offers 20 credits for use on flights within 60 days validity from the start of travel. Both passes are transferrable and the bearer’s name can be changed so long as the travel has not yet commenced. The biggest restriction is that flights need to be booked two weeks in advance and each route may only be used once.


Bangkok also embarked on an ambitious new project to ramp up its two international airports, Suvarnabhumi and Don Mueang, now close to their 60 million passenger a year capacity. These projects will be in addition to new airport projects in Phuket, Krabi, Hat Yai and Chiang Mai to accommodate tourism growth due to the expansion of low-cost carriers (LCCs) in the country. Don Mueang has found a new lease of life 100 years after it was opened in 1914 thanks to the surging popularity of LCCs, such as AirAsia X, NokScoot and Jet Asia. Suvarnabhumi will see up to five development phases, which when completed will enable the country’s main airport to handle 120 million passengers per year with up to four runways.


Cambodia Angkor Air (CAA) agreed with Viet Flight Training to restart training local pilots in Cambodia with plans to train 50 to 70 pilots for a fee of $80,000 per student. The Cambodian pilots will be trained in facilities in Vietnam and the United States before returning to work exclusively for CAA. It’s a scheme with a cost though, as students need to pay the school fees up front, and then, if they obtain the necessary results, they will be reimbursed 50 percent, according to CAA.

In October 2014, the Korea International Cooperation Agency also announced a $10 million deal to set up a local civil aviation training centre. The facility, which will provide training for ground staff, flight crews and air traffic controllers, is expected to open at Phnom Penh International Airport in 2015.